Coupa Heads for the Clouds — eProcurement, T&E and Beyond (Part 1)

A few weeks back, Coupa announced their latest solution release which includes a number of enhancements and new capabilities. I had the chance to catch up with Coupa prior to the announcement and also took a closer look at their latest solution release in a product demonstration shortly thereafter. Without question, Coupa is a provider that is building momentum in the Spend Management market. Are they all things to all procurement organizations? Not on your savings life -- but that's not the idea. Coupa is about faster, easier and cheaper, simplifying how middle-market and smaller Fortune 1000 organizations spend with indirect suppliers and now, across T&E related areas as well. In this three-part series analyzing Coupa's latest release, I'll analyze both their progress to date as well as double-click on their latest features, offering a relative viewpoint about how these capabilities stack-up and, as important, how I think they'll be received by customers.

First, let's start with just the facts. Coupa is claiming that they're up to over 128 customers. By my own calculations, they appear to be the fastest growing eProcurement vendor by individual customer count (though there are still vendors whose revenue from a single deal is larger than all of what Coupa made in 2009, so don't get too wrapped up in just the absolute customer acquisition number). Coupa's subscription renewal rate is 96% which is at the higher-end of vendors in the SaaS (or cloud, if you will) market -- though not off the charts. However, Coupa's claimed 3 week average deployment time is quite exceptional in comparison to others. And their 100% uptime during late Q4 and early Q1 is also impressive for a growing SaaS/cloud business.

From a positioning standpoint, Coupa is now describing itself as a "single solution for controlling all non-payroll spend in the cloud". This is not entirely accurate, as their capabilities around direct, services and indirect spend are not fully baked, though relative to other eProcurement vendors that only focus on indirect, this is a more able claim. How they deliver on this promise, however, is differentiated through a combination of functional capabilities in the eProcurement and T&E areas and a combination of executive dashboards, real-time reporting mechanisms and user network-driven third-party benchmarks. Currently, Coupa is providing their executive spend dashboards and benchmarking capabilities as part of their basic package, but is charging a small premium to add T&E capability into the mix (more on this later).

Coupa has put a Spend Management stake in the ground by arguing that its solution is up in the cloud vs. "SaaS 1.0" as it categorizes vendors including Ariba and Concur which they, not entirely accurately, claim "require IT to change approval workflows," among other comparative suggestions. Coupa is, however, standing on more objective comparable ground when it claims that it really is -- or close to -- "as easy as Google to use" by providing "rapid configuration and deployment via TurboTax-like wizards". I would agree with Coupa that their usability is a cut above anyone else in the market. But from an integrated T&E and eProcurement perspective, ExpenseWatch can also make similar claims around functional integration and combined reporting. Moreover, ExpenseWatch is a more economic solution for smaller and middle market companies who aren't happy with Coupa's price hikes in the past 18 months.

In my view, where Coupa really excels with its latest release is not just in the functional addition of T&E reporting, a module that may prove sufficient for many companies but lacks some of the functional richness of Concur, Rearden and others. Rather, Coupa excels in the overall user, administrator and management experience. At all levels, Coupa has really thought through the essential information a user needs to consume with a minimum amount of navigational fuss. Whether it's monitoring estimated vs. actual budget consumption on the business unit or functional level -- or helping to guide a user to a purchase that fits within either strict or looser definitions of compliance depending on category, policy and established supplier relationships (or not) -- Coupa is pushing the actual purchasing experience, especially for middle market companies, to an entirely new level, based on how they work with the application itself and visualize information. They're not 100% there yet from a functional perspective, but for companies that don't need all the capability bells and whistles, the actual experience Coupa delivers will pleasantly surprise if not positively overwhelm both those new to the Spend Management arena and those upgrading from older generation solutions.

Jason Busch

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